Carpe Diem

CoreLogic: US housing recovery accelerates at yearend as November home prices increase nationwide by 7.4%

CoreLogic is reporting today that its repeat-sales Home Price Index, based on sale prices for the same homes over time, posted a 7.4% year-over-year gain in November (including distressed sales), which was the largest annual increase in home prices nationwide in more than six years, going back to May 2006 (see chart above).  It is also the ninth consecutive monthly increase in national home prices on a year-over-year basis starting in March of last year. The last time there were that many back-to-back monthly increases in year-over-year home prices was in 2006.  Excluding distressed sales, CoreLogic reports that national home prices increased annually by 6.7% in November.

Looking forward one month, the CoreLogic Pending Home Price Index predicts that national home price appreciation will accelerate even higher in December, with an estimated 7.9% annual increase in last month’s home prices compared to December 2011 (see chart above).

CoreLogic chief economist Mark Fleming commented: “As we close out 2012 the pending index suggests prices will remain strong and the gains made in 2012 will likely be sustained in 2013.”

From Anand Nallathambi, president/CEO of CoreLogic, “For the first time in almost six years, most U.S. markets experienced sustained increases in home prices in 2012.  We still have a long way to go to return to 2005-2006 levels, but all signals currently point to a progressive stabilization of the housing market and the positive trend in home price appreciation to continue into 2013.”

MP: The case that a US housing market recovery is now underway is further strengthened by today’s report on national home prices from CoreLogic, which is based on repeat-sales like the Case-Shiller home price index, but is more comprehensive geographically (covering areas that represent 86% of the US population compared to 20 metro areas covered by Case-Shiller) and more representative of recent (and pending) sales activity (Case-Shiller is based on a three-month moving average of home prices and released with a two-month lag). With almost every new report on housing prices, home sales, construction, housing starts, homebuilder ETFs, and builder confidence showing ongoing improvements (see examples here, here and here), at some point even the housing bears will have to admit that the robust 2012 US housing recovery is real.

6 thoughts on “CoreLogic: US housing recovery accelerates at yearend as November home prices increase nationwide by 7.4%

  1. Dr. Perry — You’ve made a number of posts that show that housing prices and activity are getting MUCH better, that labor markets seem to be picking up somewhat and that credit is ready available. So what is holding back overall growth? Rational expectations?

  2. sam-

    housing prices are up. no question.

    but employment is not really going much of anywhere.

    http://www.bls.gov/news.release/empsit.nr0.htm

    we’ve been more or less stalled for months in terms of the actual number of people working.

    it’s up less than 1% since february.

    credit is not readily available. business loans are tough and credit requirements high.

    the other thing dropping gdp is state and local government spending. unlike our feds, they actually have to cut employment and spending when they run out of money.

    from what i am seeing (as someone who speaks to a lot of small companies) the big thing holding people up is uncertainty.

    the regulatory and financial markets are so uncertain and the federal government so active and influential that no one has any idea what to expect. businesses tend to look out 3-5 years when making investment decisions. if you cannot see that far, you hoard cash and sit on your hands.

    this is one of the factors that greatly deepened the depression. i recommend amity schlae’s excellent book on this “the forgotten man”.

    “when the buffalo are dancing, it’s a bad time to set up your tepee”

    -apocryphal indian saying

    but that’s more or less where we are.

    cheap money cannot solve a lack of visibility.

    i hear the “i have no idea what to expect/what these new laws even mean for us” complaint all the time.

    obamacare is going to cost 100′s of billions just in costs of companies figuring out what it means to them and how to comply/adjust. that’s real deadweight loss. it also defers decisions until later. you need to figure out your actual cost of labor before making investment decisions and right now, no one even knows what the exchanges are going to look like.

    add in enviro regs and dozens and dozens of others, and it’s just a very uncertain environment.

    that is a major (and often overlooked) cost of big government and whoo doggie are we paying it right now.

    • I’ve read Schlae’s book. I was just trying to get Mark to provide his take on why all of the good news he’s been posting (today it was that commercial lending is back up above pre-recession levels) has not resulted in more good news in the employment or GDP pictures. My own guess is that the rational expectation of future tax increases (particular on hiring full-time employees), regulation and unmanageable government debt makes holding cash (or T-Bills) much more attractive than current rates would ordinarily suggest.

  3. Housing prices being forced up by printed money is not necessarily a good thing.

    It will merely cause more unsavvy buyers to overextend themselves yet again.

  4. We’re experiencing a “real” housing recovery… like the one that evaporated in 2007/2008? There is some real productivity that may be fueling sustainable housing spending in pockets of the country (ND, PA for example), but morganovich is right… the federal drag continues to eat at both our entrepeneurial spirit and accumulated stock of capital.

  5. There is little doubt that house prices have gone up for a while. But the real issue is sustainability. Just how long do we expect the Fed to be able to keep buying all those treasuries without a response from the credit markets? And just how long can the USD defy gravity?

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